Key Insights:
- Tokenized gold is gaining popularity among crypto investors in Asia, with Tether’s XAUT showing impressive market performance.
- In spite of easing trade tensions, gold remains a favored investment due to uncertainties in U.S. policy and an expanding budget deficit.
The preference for tokenized gold, particularly Tether’s XAUT and Paxos’ PAXG, is strong among crypto investors in Asia who are seeking safe havens amidst de-escalated trade war tensions.
Recent on-chain data indicates that Tether’s XAUT has emerged as one of the top-performing assets in the digital realm, surging by 3.4% within the last 24 hours.
According to CoinGecko, the market for tokenized gold is up 4.3% in the last 24 hours, in contrast to the CoinDesk 20, which has seen a decline of 2%.
Initially, gold prices dropped during the early hours of trading in Asia after reaching an all-time high in U.S. trading hours. Currently, it is valued at $3,218 in Hong Kong.
Asian equity markets are displaying varying performances: Hong Kong’s Hang Seng index decreased by 0.2%, Shanghai’s SSE increased by 0.12%, Taipei’s TAIEX rose by 1.6%, while Tokyo’s Nikkei 225 fell by 3.5%.
Historically, gold tends to thrive during times of significant economic or geopolitical uncertainty, as investors opt for assets regarded as stable in the face of volatility. Though trade tensions are easing, there are worries regarding unpredictable U.S. governmental policies.
Gold also benefits from a negative correlation with interest rates; lowered rates diminish the opportunity cost associated with holding gold, enhancing its appeal. Additionally, there is growing concern about the soaring U.S. budget deficit.
A notable quote from Jeffrey Gundlach captures the current sentiment: “Halfway through fiscal year 2025, the U.S. Budget deficit increased by $1.3 trillion. So we are up to a $2.6 trillion annual rate. That rounds up to an incredible 9% of GDP. Things are getting serious.” — Jeffrey Gundlach [April 10, 2025]
Recent reports from China’s state media suggest that stimulus efforts are anticipated, which may involve interest rate reductions and government spending proposals totaling $136 billion.
Among other notable market performers, Curve DAO’s CRV rose by 18% following news regarding U.S. plans to relax regulations significantly related to Decentralized Finance (DeFi).
